No industry has been able to escape the effects of the COVID-19 pandemic, and that includes real estate.
In the case of those who build, remodel, buy and sell homes, however, the impact of the novel coronavirus has been much more mixed than for many types of businesses.
“It’s been very hectic,” said Dennis Brand, a builder and developer who works in Waterloo and Columbia. “The virus hit and we thought we’d be very slow, but it’s been just the opposite.”
Since March of last year, demand in this area has risen for both new homes and renovation work.
“Monroe County’s market has been amazing,” Tammy Mitchell Hines, owner of Tammy Mitchell Hines & Co. Real Estate, said.
A few factors have been driving that demand, according to local experts.
One has been Monroe County itself, which continues to grow.
Brand said clients have told him they wanted to move here for reasons including the downtown areas of Waterloo and Columbia, increasingly pedestrian-friendly towns, controlled growth of the county, safe communities and small, well-regarded schools.
“People really want to live in this area,” Brand summarized. “We’re definitely in a very good area.”
Lisa Meegan, a real estate broker with RE/MAX Preferred, said interest rates under 3 percent have also helped the housing market boom during the pandemic.
“Interest rates are at an all-time low. You can buy a lot more home for less,” she said.
Yet another contributing factor has been how much people have been staying at home more than normal, and that has led individuals to spend some of their free time improving their house and, in some cases, wanting to then sell it.
“Everybody’s just sitting at home, staring at those same four walls,” noted Waterloo Lumber Company owner Brian Bode.
While the rising demand has been a boon for the industry, it has also faced its share of challenges, with perhaps the most difficult one being the rising cost of materials.
For example, the National Association of Home Builders reported last month that the cost of lumber has risen 180 percent since April 2020, causing the average price of a single-family home to jump up $24,000.
“They’ve done nothing but go up,” Bode said of lumber prices.
“Before this happened, lumber prices were very low,” Brand added.
The demand is helping drive up some of those prices.
Bode said that when a shipment of lumber comes across the border and makes its way to St. Louis, it used to be possible to purchase when the train arrived here.
Now, though, he said individuals are pre-ordering their wood before it arrives, so he cannot wait for it to get here before he buys it and must purchase supplies weeks or more in advance.
“Everybody’s kind of building at the same time,” Bode explained, noting the housing market is booming in Texas and residents are still rebuilding after wildfires in California. “It’s not just here. It’s nationwide.”
The shortage includes all types of lumber, and it extends to other materials like drywall, tempered glass and insulation.
“I don’t think there’s an end in sight,” Bode said. “Talking to the people I know, they don’t think it’s going to be any different this year.”
Prices have also increased because of shortages caused by the pandemic, as places like lumber mills have been forced to close due to COVID outbreaks.
“They weren’t prepared for it,” Bode said. “It’s nothing anyone did. It’s just a perfect storm that hit.”
The cost of materials then has a ripple effect on the real estate market.
“The cost of existing homes is down compared to the price of new construction,” Hines said.
That has not stopped people from wanting to buy homes, especially in Monroe County, as buyers are waiving normal provisions like home inspections or warranties in an effort to make the best offer.
“They’re doing whatever they can to make their offer look good,” Meegan said.
“There’s more to it than just prices,” Hines agreed. “If buyers want a house, they have to come out with a great offer.”
For instance, Meegan said she made an offer on a home in Dupo for a client recently that was $15,000 over the asking price, but the seller still received a better offer.
“People are willing to pay more,” she said.
The demand for homes has actually caused a problem in Monroe County.
“The problem we’re having right now is we’re having a lot of sellers who are waiting to sell because they have nowhere to go, “ Hines said.
That Catch-22 means some people may miss out on what Meegan said is a “great time to buy.”
“Buyers are buying, and sellers are wanting to sell. It’s just, right now, we don’t have the inventory in Monroe County – especially Waterloo. It’s a good problem to have,” Meegan said. “Sellers aren’t selling because there is nothing to buy. Unless you have somewhere to live or you can live with family, we’re kind of stuck.”